Fitch lowers Graanul secured notes to B+

Fitch Ratings said it lowered the senior secured rating of Cullinan Holdco SCSp's (Graanul) to B+ from BB- after it revised the recovery rating to RR4 from RR3. Graanul’s unrated revolver is super senior to the notes. The agency also revised the outlook to negative from stable and affirmed the B+ issuer default rating.

“The negative outlook reflects uncertainties related to recovery in wood pellet markets, and the ability of Graanul to improve EBITDA margins following a sharp decline in earnings in 2023, driven by the impact of negative margin contract, lower sales and weaker pricing on the spot pellet market. It also reflects the forecast leverage remaining above our negative sensitivity in 2023-2024, as well as lower liquidity, which we expect to be constrained by end-2023,” Fitch said in a press release.

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